M&G will exit the adviser platform market as it looks to streamline its operating model.
In its half year results published today (September 4), the firm said following a strategic review, its competitive position in the wealth market was not “sufficiently strong” to ensure profitable growth without committing “significant” further resources.
As a result of this, M&G has decided to “focus and rationalise” its wealth strategy.
It said: “Our future focus will be on continuing to grow the distribution of our own solutions through our restricted advice channel and independent advisers, and making our propositions more accessible on third party platforms.”
In addition to exiting its adviser platform, the firm has decided to combine its wealth and life arms of the business which will be overseen by Clive Bolton in an attempt to simplify the operating model.
“Through these changes, we remain committed to the UK retail market, which offers a compelling growth opportunity for M&G," the results added.
“This will allow us to concentrate our resources, complementing PruFund with the life insurance solutions that our clients want, reduce duplication and improve operational efficiency. Underpinning these decisions is our ongoing drive to deliver improved client outcomes."
The firm also said it would increase its cost savings target from £200mn to £220mn by the end of 2025, after already delivering £121mn in savings.
M&G said it had seen an improvement in its asset management cost-to-income ratio from 79 per cent to 77 per cent , as a result of its focus to drive down costs.
“However, we recognise that we need to go further, as this remains our most challenging target to achieve by the end of 2025,” it said.
According to the results, M&G Wealth experienced net outflows of £0.9bn for the first six months of 2024.
It attributed these outflows to the higher interest rate environment causing many of its target customers to choose to invest in cash and guaranteed solution products rather than multi asset investment solutions, such as PruFund.
Andrea Rossi, group chief executive said he was “confident” in the long-term outlook for M&G.
Rossi said: “Over the last 18 months, we have made meaningful progress transforming M&G by focusing on our strategic priorities: financial strength, simplification, and growth.
“Against the backdrop of a challenging market environment in the first half of the year, we have delivered another resilient financial performance with adjusted operating profit and capital generation nearly matching last year’s excellent results."
He added M&G has made "considerable progress" across its financial targets.
Other results
Elsewhere in the results, M&G revealed it was upgrading its operating capital generation target from £2.5bn to £2.7bn by the end of 2024 with the current figure sitting at £486mn.
Adjusted operating profit before tax was £375mn as well as net client inflows of £1.9bn.
M&G had 62 per cent of its mutual funds ranked in the upper two performance quartiles over three years and 66 per cent over five years.
